Rates on US Treasury bills drop at weekly auction to lowest levels since early February

WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction to the lowest levels since early February.

The Treasury Department auctioned $25 billion in three-month bills at a discount rate of 0.045 per cent, down from 0.050 per cent last week. Another $23 billion in six-month bills was auctioned at a discount rate of 0.065 per cent, down from 0.075 per cent last week.

The three-month rate was the lowest since these bills averaged 0.040 per cent on Feb. 3. The six-month rate was the lowest since these bills averaged 0.060 per cent, also on Feb. 3.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.86 while a six-month bill sold for $9,996.71. That would equal an annualized rate of 0.046 per cent for the three-month bills and 0.066 per cent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged down to 0.13 per cent last week from 0.14 per cent the previous week.